A growing realization is dawning for European shale gas operators that “serious” man-made and technical obstacles may block attempts to replicate U.S. experiences with shale gas, according to London-based analyst Chatham House.

“Environmentally based opposition to shale gas operations is growing apace, especially in Europe, and the debate is becoming increasingly polarized and even vicious,” wrote analyst Paul Stevens. “This debate is also coinciding with much greater skepticism regarding the levels of technically recoverable shale gas resources.

“Newer estimates tend, almost without exception, to be lower than previously claimed. At the same time there is growing realization in Europe that there are serious obstacles to replicating the experience in the United States. Much of the earlier hype has dissolved and the dates for significant impact are being extended.”

Stevens’ latest analysis follows one he wrote for Chatham House that was published in September 2010. The report at that time considered two key questions: could the shale “revolution” continue in the United States and could it be replicated elsewhere?

“The answers to both questions were ambivalent,” said Stevens. “The resulting uncertainty was beginning to inhibit investment in conventional and unconventional gas. Thus the report argued that in five to 10 years’ time, given that gas demand would continue to grow, there could be gas shortages because of the long lead times on projects to develop supplies. At the same time, this uncertainty threatened to inhibit investment in renewable energy on the grounds that the prospect of large volumes of cheap gas might appear to provide a cheaper route to a lower carbon economy than high-cost renewables.”

Since his analysis two years ago, “an extremely sharp division has developed between the proponents and opponents of shale gas,” Stevens said. “As battle lines were being drawn, many analysts, including this author, found themselves in a ‘no man’s land’ between the warring parties, simply uncertain as to the realistic prospects for shale gas. A number of developments have reinforced the uncertainties emphasized in the original report.”

Uncertainties regarding shale’s future impact “remain unresolved,” he said. “How far technically recoverable resources of shale gas will translate into actual production continues to create serious investor uncertainty. If the hype turns into reality, then world energy markets can look forward to floating on clouds of cheap gas, certainly up to 2030, if not beyond.”

If the “hype remains hype then current investor uncertainty will limit future gas supplies. Assuming gas demand continues to increase, the effect in the next five to 10 years would be much higher gas prices.”

Another “consequence” of cheap gas is growing concern that the cost of renewables to attempt to mitigate climate change “is too high and likely to rise even higher,” said Stevens. Many see the increased use of gas as a transition fuel to a lower carbon economy rather than building expensive renewables facilities; “the anticipation of cheap natural gas could inhibit investment in renewables. But…if the revolution fails to deliver a lot of cheap gas, by the time this is realized it could well be too late to revert to a solution to climate change based upon renewables.”